Investment, Enterprise and Development Commission, fourteenth session (Opening plenary)
29 April 2024
Your Excellency, (Mr.) Mai Phan Dung, Permanent Representative of Viet Nam and Chair of this Commission,
Excellencies,
Distinguished delegates,
Ladies and gentlemen,
I welcome you to the 14th session of the Commission on Investment, Enterprise and Development. This session focuses on two factors that have always been essential for driving progress, improving living standards, and addressing the challenges of the modern world: Investment and Technology.
But the current global investment landscape is fraught with struggles, including slow growth, geopolitical tensions and increasing economic fracturing. These hurdles often dissuade both domestic and international investors, and as a consequence stifle growth and innovation.
According to our latest Global Investment Trends Monitor, in 2023, foreign direct investment flows continued to decline. They dropped by 18 per cent. FDI flows to developing countries decreased by 9 per cent, to 841 billion US dollars. Across regions, FDI flows declined or stagnated.
These concerning trends are part of a broader picture of shifting patterns in global investment flows resulting from fracturing and structural challenges: Investment in manufacturing is struggling. Investment is shifting to higher-value added and more technologically complex sectors, and it is becoming less tangible. This means that the types of investment that developing countries have typically relied on for industrial transformation and integration in global value chains are harder to get.
These trends add to the challenges of investment-for-development. The levels of investment needed to achieve the Sustainable Development Goals far exceed the available finance. As it currently stands, the SDG investment gap in developing countries goes up to four trillion US dollars annually. While middle-income countries bear the brunt in absolute terms, the weight is most crippling for least developed countries. Their financing needs can reach up to 30 per cent of GDP.
UN Trade and Development has been collaborating with stakeholders across the investment spectrum to nurture an ecosystem that supports the growth of sustainable investments and finance. A great deal focused on enhancing accountability, consistency and market credibility. These discussions were also at the core of the World Investment Forum last year, and resulted in new policy tools, partnerships, and capacity-building initiatives.
In these discussions, investment facilitation has received increasing attention. In fact, the topic has been on the agenda of policy dialogues at plurilateral, regional, and bilateral levels.
By lowering operational costs and enhancing service delivery, investment facilitation can help attract investment. It offers investors information and transparent and streamlined procedures, often supported by digital government tools like information portals for businesses and online single-window systems.
These tools can be expanded to cover other government areas and public services. And this is key. By laying the foundations for broader digital government initiatives, investment facilitation can strengthen institutions and mitigate weaknesses in governance that hinder investment.
This afternoon and tomorrow, we will explore best practices and future directions for integrating digital tools into broader e-government practices, and how strategic investment facilitation can support sustainable development.
Now, let me turn to technology. To find solutions to the development challenges we face, we need the power of technology and innovation.
Frontier technologies hold immense potential to accelerate development by enhancing productivity, creating jobs, enabling knowledge sharing, improving health or promoting sustainability. More concretely, artificial intelligence can optimize supply chains, or the Internet of Things can monitor air and water quality.
Data are the cornerstone for many frontier technologies. Data have emerged as a vital economic asset, they are crucial for decision-making processes. However, the high concentration of data and data capabilities in the hands of a few operators could exacerbate the digital divide and widen disparities across and within nations.
To realize the benefits of frontier technologies requires the right skills, strategic policies, investments, and capacity-building efforts to ensure that the benefits are equitably distributed and that potential risks are effectively managed. Otherwise, accelerated technological change risks deepening inequalities.
The market value of frontier technologies was already 1.5 trillion US dollars in 2020. We project that this market could reach 9.5 trillion by 2030 - thus a market more than twice the size of the Indian economy. But so far, only a handful of developing countries have been able to compete in this market.
During this Commission, we will have the opportunity to examine the development potential of blockchain – one of the major frontier technologies. This technology has the potential to democratize data and accelerate progress towards the SDGs.
But often it is a technology that is misunderstood and presents many challenges for policymakers.
Developing countries face various challenges in adopting blockchain technology. For example: Limited access to reliable and affordable internet services, a deficit in digital literacy, or effective connections between domestic innovation ecosystems and global network.
Thus, strengthening digital infrastructures and skill development are essential to pave the way for adopting the technology. And the more advanced developing countries could accelerate the pace by establishing blockchain incubators, innovation hubs and networks.
International organizations also have a role to play in supporting developing countries in building their national capacities in this respect. That is why, we together with the five UN regional economic commission have developed a project on “Blockchains for facilitating trade and enhancing competitiveness”.
Tomorrow afternoon, we will have a session to discuss how national policies and international collaboration could support countries to seize the benefits of blockchain.
Distinguished delegates, ladies and gentlemen,
Investment and technology have always been crucial for progress but we need to ensure that they are also a force for development.
This is the conversation we want to have today and continue at our upcoming 60th anniversary events.
I wish you engaging discussions and thank you for your attention.
